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news.MDRNA, a RNAi-based drug discovery and development company and Cequent Pharmaceuticals have signed a definitive agreement pursuant to which MDRNA is expected to acquire Cequent in an all stock transaction valued at approximately $46m.
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The combined company is expected to have multiple proprietary RNAi drug discovery platforms with the capability to deliver RNAi-based therapeutics via systemic, local and oral administration.
In addition, the acquisition expands MDRNA’s oncology pipeline with a product for Familial Adenomatous Polyposis (FAP), that will soon begin Phase 1 clinical testing under an investigational new drug application (IND) filed with the FDA.
The transaction is expected to include certain loan provisions that will fund MDRNA operations through the anticipated closing of the merger in early July 2010.
The combined company will be headquartered in Bothell, Washington with offices in Cambridge, Massachusetts. RNAi drug discovery, research and biology will continue to be conducted at MDRNA’s state-of-the-art R&D facility in Bothell while clinical operations will reside in Cambridge.
Additionally, the combined company will leverage resources and its proven management team to further advance MDRNA’s proprietary UsiRNA construct and DiLA2 delivery technologies as well as Cequent’s TransKingdom RNAi technology to develop novel RNAi-based therapeutics. In addition, Cequent will have certain cash amounts on hand at the close of the acquisition which will fund the combined operations into December 2010.
Bruce Thaw, chairman of the board at MDRNA, said: “We anticipate that this transaction will accelerate the development of the most promising products of both companies. We believe that the combined company will be in a strong position to advance multiple RNAi drug discovery platforms, establish premier R&D partnerships with large pharmaceutical and biotechnology companies and accelerate RNAi-based therapeutics to patients in need.”
Michael French, president and CEO at MDRNA, said: “The combined company will have a unique set of complementary capabilities, skills and clinical programs. With a world-class research, development and clinical team, a broad intellectual property estate and a clinical pipeline, we believe the combined company will emerge as one of the preeminent leaders in the RNAi sector. We are very excited to bring to MDRNA the unparalleled expertise and commitment of the Cequent team.”
Mr French will serve as the president, CEO and board member of the combined entity. Peter Parker, Cequent’s president and CEO, will assume the Chairmanship of the combined company’s board of directors. The new board of directors will include an additional five members, two each from the existing boards of MDRNA and Cequent, and one additional independent director to be chosen by the new combined Board.
Peter Parker, president and CEO of Cequent Pharmaceuticals, said: “This transaction is a great fit for Cequent. We were seeking access to a world class RNAi research team, and MDRNA was looking for strong development, regulatory and clinical management expertise. For our venture capital backers, who include Ampersand, Novartis and Pappas Ventures, this natural evolution of their investment will allow us to reach the next level of success.”